Choosing a Financial Advisor: Part 5 - Platitudes

Personal Money Planning |

By Gary Silverman, CFP®

Last week we finished a four-part series on choosing advisors. Then I read an article in a trade publication which reminded me of various platitudes you may encounter when seeking a financial advisor. What follows are quotes that Chat GPT dug up from the Internet. Heck, I have used some myself. I’m sorry.

"We provide expert guidance to help you navigate complex financial markets." Well, I would hope so because I am not interested in hiring an amateur!

"We stay up to date with the latest market trends and investment opportunities." Oh, so you do your job? I mean, are there firms that don’t do this? Perhaps another question to ask is how can any firm keep up with everything going on?

"We have a fiduciary duty to act in your best interest." And a thief has a duty to not rob me. How about telling me what this is, why I care (you should), and how you go about doing it?

"Our strategies are designed to minimize risk while maximizing returns." Well, I’d rather work with a firm that maximizes risk and minimizes returns. Come to think of it, how exactly do you minimize risk and at the same time maximize returns? Last I saw (I keep up to date after all), there is a trade-off, so you can’t do both. (I acknowledge here that studies show diversification can give the same returns with less risk, up to a point…. but I digress).

"We prioritize your financial security and peace of mind." What I often see is the advisor tends to have the prospect note something they are worried about and get them worked up enough about it to hire them. Reworded: I mess up your peace of mind so that I can give it back to you later.

“We sit on the same side of the table as our clients.” Nice picture. I’ve used it myself. But this is the client’s life and money. Either I work for a company that provides financial products and am sitting at a different table trying to get you to buy something, or I am an advisor who stands between these two tables with a goal of making sure only what you need gets slung across the room.

“This is a win-win relationship.” Is it? If I charged you less money, then you’d win more, wouldn’t you? In an advisor-client relationship, the client (hopefully) gets something they consider valuable, and I guarantee you the advisor will. If you want to call that win-win, then fine. But in that case buying a car is a win-win, grocery shopping is win-win, and so is paying taxes.

“We have integrity.” Hmmm. If you have integrity, you will say this. If you don’t have integrity (and weren’t an idiot), you will say this. So basically, you have said nothing.

While these phrases may be used sincerely by many financial professionals, it's important for potential clients to do their homework and question the advisor before deciding. It is, after all, your money that we’re talking about.

Hoping the government isn’t shut down when you read this.